Chapter 9 Flashcards
(23 cards)
What are the main methods of discharging a contract
(1) performance (2) breach (3) agreement between the parties (4) frustration
Explain complete performance in terms of discharging a contract
Each party fulfills exactly what was agreed upon in the contract.
Explain substantial performance in terms of discharging a contract
Occurs when one party fulfills enough of their contract obligations to warrant payment, with possible deductions for unmet aspects.
Describe when a breach of contract will relieve the opposite party from its obligations
Conditions vs Warranties - breach of a conditions (a major term) relieves the non-breaching party from further performance, while breach of warranty (a minor term) does not.
Explain what tender of performance is
When one party is ready, willing, and able and attempts to perform but performance is refused by the other party.
What happens when one party refuses to pay for an attempted performance in a contract
Person who attempted performance may sue for damages
Explain what a fundamental breach of contract is
A breach that goes beyond to the very root of the contract—one party is denied the benefit it bargained for in the contract.
Explain what refusal to perform (repudiation) is
One party indicates to the other an intention to abandon and altogether to refuse performance of the contract
Explain how a contract may be discharged by mutual agreement
Both parties consent to end the contract with or without additional consideration
Explain how a contract may be discharged by novation
All parties agree to substitute a new party for one of the original parties to the agreeent
Explain frustration in discharging a contract
An unforeseen event substantially changes the contracts nature or makes it impossible to perform
What are the effects of frustration in discharging a contract
obligations are discharged and losses lie where they fall unless legislation or the contract states otherwise
Explain what a force majeure clause is
Spells out who bears the risk if certain events occur
Explain how the court treats a victim of breach
Restored to all original positions or in the position they would have been in if the contract had been properly performed
Describe how damages for breach of contract are assessed
Foreword-looking damages: courts compensate the non-breaching party for the loss they suffered due to the breach.
What is the equitable remedy available when specific performance was an issue within a contract
The court orders the breaching party to fulfill their contractual obligations when damages are inadequate
Give an example of a discharge by performance
A contractor completes a home renovation exactly as specified in the contract, which discharges the contract by performance.
Give an example of breach of contract
If a caterer fails to provide food for an event, this constitutes a breach of a condition, and the client is no longer obligated to pay.
Give an example of discharge by agreement
A landlord and tenant mutually agree to end a lease early, releasing each other from the remaining obligations.
Give an example of frustration of contract
A concert hall burns down before an event, frustrating the contract between the event organizer and the hall owner.
Give an example of damages for breach of contract
A business can be awarded damages for the loss of profits due to a suppliers failure to deliver key components on time.
Give an example of specific performance as an equitable remedy
A court orders a seller to complete the sale of a unique property as damages would not compensate for the loss of the opportunity to own that specific property
Give an example of injunction as an equitable remedy
A court prohibits a former employee from working with a competitor due to a breach of their non-complete agreement.
